Federal government offers farmers relief but may not go far enough, says expert

Advance Payments Program interest free portion returned to $250,000

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Published: April 1, 2025

Federal government offers farmers relief but may not go far enough, says expert

Farmers can expect some relief from the U.S. tariff threat by way of a government investment in business protection measures, but the new initiatives may not go far enough.

In March, the federal finance department announced several investments meant to protect Canadian businesses, including $1 billion in financing through Farm Credit Canada. According to a news release, the money will help to reduce financial barriers in the agriculture sector.

“This lending offer will help address cash flow challenges so businesses can adjust to a new operating environment and continue to supply the high-quality agricultural and food products that Canadians rely on,” the release read.

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The federal government also announced a $5 billion program to help Canadian exporters reach new markets.

U.S. President Donald Trump went ahead with a long-threatened 25 per cent tariff on most Canadian imports early in March before announcing a temporary suspension on goods covered by the Canada-U.S.-Mexico Agreement.

With Trump now threatening more reciprocal tariffs on Canadian commodities such as dairy and lumber, however, the situation is still unstable.

As well, China announced plans to impose tariffs on Canadian canola oil and meal, peas, pork and aquatic products.

The government also announced it will return to the $250,000 interest-free loan limit of the Advanced Payments Program through the 2025-26 program year. It was previously announced at $100,000.

Tyler McCann, managing director of the Canadian Agri-Food Policy Institute, said he was glad to see the government taking some action.

“Now, when there is heightened uncertainty and when farmers are looking at potentially more expensive inputs going into this growing season, giving them that access to the higher APP amount is a good, easy thing to do.”

However, McCann said many of the investment announcements fall short.

One other announcement included $5 billion through the newly-launched Trade Impact Program, meant to help exporters reach new markets, something experts have been recommending. CAPI’s February Ag Policy Brief included the short-term recommendation for the government to “double down on market access” and “prioritize political and technical resources to resolve market access barriers.”

McCann said the Trade Impact Program was not what he had in mind.

“I think that there’s a really big difference between extending more credits to Canadian businesses, which is largely what today’s announcement was, and the government investing in things like the agri-marketing program,” he said.

“The government could be saying today to food processors that are exporting, or the canola council or the Canadian beef exporters, ‘we are going to match any extra dollar you invest in market development in a new market through additional ag or marketing dollars.’ But see that as an investment, don’t see it as financing, like what the government has done.”

Likewise, he said the $1 billion investment into Farm Credit Canada may not see drastic results.

“My understanding is that access to credit has not been a challenge at FCC, and if you’re a farmer that’s needed credit, FCC has been able to work with you,” McCann said.

“So, I’m not sure at the end of the day what impact this will actually have.”

“I think it would be very different if the government had announced an accelerated capital cost allowance, or a tax credit, or faster depreciation rules for investments that businesses make.”

In a March 7 press release, FCC chief executive officer Justine Hendricks said the funding “will rapidly deliver solutions for the industry to adapt to the changing trade and economic conditions. Initially, the focus is on assisting the industry in addressing cash flow challenges so that businesses can adjust to a new operating environment.”

Overall, McCann said he was disappointed the government did not do more with the time it was given between Trump’s initial threats and last week’s implementation of the tariffs.

“What I think is unfortunate is that we have not put time and energy, in the Canadian context, into getting our own house in order domestically,” he said.

“And again, this is a little bit of that addressing financing issues, but there’s a lot of other things governments could and should be doing.”

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